So we suspect malice rather than incompetence? Whatever the case may be, we can be sure we'll hear a lot more about this in the coming year.

Here's what I bet happened. Some folks saw the drone boom and had this idea for a camera drone. How hard could it be? They made videos demonstrating not their actual product, but what they imagined they could do. They then found it out it was very hard to actually execute this idea as well as they'd hoped. At some point, they probably realized they needed to take the money and run.

I wouldn't call it malice, its just good old fashioned P.T. Barnum capitalism.

That would indeed be a scam because a CEO of a company that didn't ship or sold 1 single product should be on minimum wage. Seriously. You don't get to earn more money until you can show investors you are worth that money.

Here's what I bet happened. Some folks saw the drone boom and had this idea for a camera drone. How hard could it be? They made videos demonstrating not their actual product, but what they imagined they could do. They then found it out it was very hard to actually execute this idea as well as they'd hoped. At some point, they probably realized they needed to take the money and run.

I wouldn't call it malice, its just good old fashioned P.T. Barnum capitalism.

Taking a buttload of money for promised deliveries of a product whose core features have not yet been demonstrated even in breadboard/prototype form sounds pretty close to me like the core definition of fraud.

So we suspect malice rather than incompetence? Whatever the case may be, we can be sure we'll hear a lot more about this in the coming year.

Here's what I bet happened. Some folks saw the drone boom and had this idea for a camera drone. How hard could it be? They made videos demonstrating not their actual product, but what they imagined they could do. They then found it out it was very hard to actually execute this idea as well as they'd hoped. At some point, they probably realized they needed to take the money and run.

I wouldn't call it malice, its just good old fashioned P.T. Barnum capitalism.

Its fraud and scam. You return the money when you realize you can't deliver.

So we suspect malice rather than incompetence? Whatever the case may be, we can be sure we'll hear a lot more about this in the coming year.

Here's what I bet happened. Some folks saw the drone boom and had this idea for a camera drone. How hard could it be? They made videos demonstrating not their actual product, but what they imagined they could do. They then found it out it was very hard to actually execute this idea as well as they'd hoped. At some point, they probably realized they needed to take the money and run.

I wouldn't call it malice, its just good old fashioned P.T. Barnum capitalism.

Reading the full complaint, that's exactly what they did. The videos were all shot with a DJI Inspire and sometimes a GoPro. It required two people to operate (one pilot, one on camera). And with the shots done on a GoPro, they even digitally altered the footage so you couldn't tell (I'm guessing they eliminate the fish-eye look). They never once had a working unit in that video. The complaint even states that they've never even produced prototype models, despite claiming in November 2015 that the first production units had come off the line.

Basically, they came up with the concept, shot a fake video, took orders, and claimed that they were well on their way to shipping, when in reality, they're no closer than when they came up with the concept. You don't see too many suits like this when a company is experiencing production delays. But it definitely sounds like this is a case where a company knows full well at this point that they're not going to get a product out the door, and are just stalling for time, hoping a miracle happens.

Making a drone is rather easy. I know two people who made quad copters from scratch, GPS navigation, gyro stabilization, the works.

Designing them so they are easy to mass produce, appealing to the public, easy to service when they break, and not too costly to manufacture? That's the challenge where most of their money should have gone into. Other people have solved these issues for less money. DJI was founded by a 26 year old with almost no money.

But seriously, the notice does say they will be providing refunds. However, their record on fulfilling promises isn't too good. It will be interesing to see if they mean that or if it's a delaying tactic.

But seriously, the notice does say they will be providing refunds. However, their record on fulfilling promises isn't too good. It will be interesing to see if they mean that or if it's a delaying tactic.

Tell that to the investors that lost their money. Do they get at least a partial refund?

Well I guess that is part of any investment, it's a risk.

But boy where those investors suckers to put money in a company that didn't even had a product to show. How dumb can you be to invest money based on some fake videos...

They're based in San Francisco. Getting some fancy office space, fitting it out with all the over-the-top fittings the neighboring companies have (waterfalls, cocktail bars, etc), then hiring staff at overinflated Silicon Valley rates (so they can pay their overinflated Silicon Valley rents)... this will all burn through cash at an alarming rate.

Not actually making a product, so your cash-flow potential is nil, also clearly doesn't help.

They're based in San Francisco. Getting some fancy office space, fitting it out with all the over-the-top fittings the neighboring companies have (waterfalls, cocktail bars, etc), then hiring staff at overinflated Silicon Valley rates (so they can pay their overinflated Silicon Valley rents)... this will all burn through cash at an alarming rate.

Not actually making a product, so your cash-flow potential is nil, also clearly doesn't help.

Auto tinting glass for the conference rooms. 70 inch screen in every room. Alienware for every employee. Loaner cars for employees to drive. Sigh. Yep. All too common.

I pre-ordered a Lily drone in June 2015. Since then, they have diligently sent me updates on progress. Having been through the start-up process myself, I've been patient. From my vantage, I see only good will and decent effort. Most start-ups just don't make it.

Also, their offering was pretty minimal, and their videos demonstrated what they said they would ship. It really does look like a production issue. Contrary to some comments here, they never offered object avoidance and were quite clear it would not be a feature.

Looking at that video, I can't believe they got people to invest that much money.

A drone that can handle obstacles by itself as well as stay on target with its camera perfectly?

The military would love to have this, and they don't even have it.

In fairness, even the video shows you need to carry a beacon to make it work and all of those shots were in wide open spaces. I'm sure if the military could get its targets to carry a beacon they might have a market.

I pre-ordered one of these. I already received a refund email with a transaction number. We'll see if it actually comes through.

The email I received indicates that they were looking for additional financing to proceed with manufacture. They were also providing almost monthly updates on their progress so it didn't feel like this was a scam. The updates also included lots of pictures and video footage that all appeared unaltered.

But seriously, the notice does say they will be providing refunds. However, their record on fulfilling promises isn't too good. It will be interesing to see if they mean that or if it's a delaying tactic.

Tell that to the investors that lost their money. Do they get at least a partial refund?

Well I guess that is part of any investment, it's a risk.

But boy where those investors suckers to put money in a company that didn't even had a product to show. How dumb can you be to invest money based on some fake videos...

According to Crunchbase there were 16 investors (including Winklevoss Capital) for a total of $15M. If I had to guess I would say that money is gone.

I hope they refund the pre-orders. Getting investors for another startup may be a case of a better business plan but if the public thinks you're a fake who wants to steal their hard earned money then the next project will be a lot more difficult.

Am I missing something? I thought Kickstarter is explicitly a crowdfunding thing. Did they ever take independent "pre-orders" because if all this is is another kickstarter not panning out, then I don't know how an attorney can claim that they took "pre-orders".

And so we see yet another cautionary tale of crowdfunding gone wrong. Did that "Chiller" cooler ever materialize?

I pre-ordered a Lily drone in June 2015. Since then, they have diligently sent me updates on progress. Having been through the start-up process myself, I've been patient. From my vantage, I see only good will and decent effort. Most start-ups just don't make it.

Also, their offering was pretty minimal, and their videos demonstrated what they said they would ship. It really does look like a production issue. Contrary to some comments here, they never offered object avoidance and were quite clear it would not be a feature.

I can't help but laugh every time this happens. At this point, do people really jump on kickstarter, see an idea, and actually think their money will bring it to fruition?

Every Kickstarter and Indiegogo Project I have backed I have received the product I backed, functioning and usually better than promised. Usually they also provided additional free goodies when things weren't 100% the way I expected them. Were there delays in many of them? Yep. Most of the time people know there's a risk involved in not getting what is being funded.

I'm not one who likes to see a business fail (the arms trade is another matter), and I hope all those who put their money in get it back, but do I want to have footpaths filled with idiots who need a selfie drone following them everywhere?

No.

If you would like more furious, fuming, flaming and fascinating drone news, please visit my Facebook page, Throw Stones At Drones, for more righteous, reckless, random and (sometimes ridiculous) views!

They were also providing almost monthly updates on their progress so it didn't feel like this was a scam. The updates also included lots of pictures and video footage that all appeared unaltered.

Serious question, since the complaint only cites a few communications. But was it not suspicious that there was an update in November 2015, saying that the first production units were coming off the line, only for it to still be vaporware a year later, and that they were looking for more funding?

Considering how much the introduction video is referenced in the complaint, I'm guessing "video footage that appeared unaltered (but was)" is going to be one of the bigger pieces of damning evidence against them.

I'm wondering if there's unaltered footage somewhere, with people throwing dummy units in the air, and them falling right down to earth.

Kickstarter has been iffy. I funded Bluesmart. They delivered, but the product has been 'eeeeh'. Bad battery, and the features are not really compelling in practice. It has a sharp design though, that's the only real nice thing about it.

Waiting to see if my funding of Bartisian pays off. They seem to making progress, but delayed for sure.